Hormel Foods (HRL) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 reached $3.03 billion, with organic net sales up 2% year-over-year, marking the fifth consecutive quarter of growth, driven by Foodservice and International segments, while Retail declined.

• Adjusted diluted EPS was $0.34, supported by strong Foodservice and International performance, but offset by Retail declines and non-recurring items.

• Portfolio shaping continued with a definitive agreement to sell the whole-bird turkey business and the sale of a majority interest in Justin’s, LLC, sharpening focus on value-added protein offerings.

• Initiatives to transform and modernize operations and a restructuring program are underway, with benefits expected to materialize more in Q2.

• Cash flow from operations increased to $349 million, mainly from inventory reductions.

Financial highlights

• Q1 net sales were $3.03 billion, with 2% organic net sales growth year-over-year; Foodservice up 7%, International up 8%, Retail down 2%.

• Adjusted operating income was $247 million; adjusted operating margin was 8.2%.

• Diluted EPS was $0.33; adjusted diluted EPS was $0.34.

• Cash and cash equivalents at quarter-end were $868 million, up $197 million from prior year-end.

• Paid $160 million in dividends, marking the 390th consecutive quarterly dividend.

Outlook and guidance

• Fiscal 2026 net sales guidance reaffirmed at $12.2–$12.5 billion; organic net sales growth of 1–4%.

• Adjusted operating income guidance updated to $1.06–$1.12 billion, reflecting 4–10% growth.

• Adjusted diluted EPS guidance reaffirmed at $1.43–$1.51, up 4–10% year-over-year.

• Q2 expected to deliver top-line growth and adjusted EPS flat to slightly up year-over-year.

• Effective tax rate for fiscal 2026 expected between 21.5% and 22.5%.